ACH Accounts: Read This First to Help Your Business!

First of all, let me congratulate you on your new business. One of the main questions you need to ask yourself is how are you going to accept payments for your goods or service that you provide? If you have decided to automatically debit your customers checking account than you will need to apply for a ACH account. But, before you do that you need to read the following first.

Is your business brand new? Did you just register it? Lets say that it is brand new and it is registered. When you apply for a ACH account, you will be asked how long you have been in business. Some banks will not give you an ACH account unless you have been in business at least three years. Your best option would be to apply directly with a ACH company. But, some of them will not approve a new business.

What kind of credit do you have? If you are a sole proprietor than you will be using your personal social security number after you register your business with the IRS. As a result, your credit rating will be used based upon your personal credit history. Here comes the bad news. If you have bad personal credit, you will be denied an ACH account. Improve your personal credit and than you can apply again.

What kind of business do you have? When you apply for a ACH account you will be asked what is your business name and a brief description. Sometimes they will ask for a business plan too. It all depends on what type of business you have. If you are considered to be a high risk business, you probably will not get approved for a ACH account. If you are a new lending company, whether private or public, you will probably be denied an account unless you can show that you adhere to all of the regulations and licensing needed to do business in the financial sector.

The bottom line. All of the above things are considered when you apply for a ACH account. But if you get denied because your business is high risk, bad credit, type of business or length of time in business. Don't despair. You can get a bank draft account. There is no approval process. You have your customer fill out a customized form. You submit it to the bank draft company. They send you the checks in the mail. You deposit the checks into your business bank account for deposit. That's it!

Now you know what to expect when you apply for a ACH account. Good luck!